Alphabet stock surged 33.8% in April, driven by strong Q1 2026 results and announcement that it will begin selling TPUs to select customers outside Google Cloud.

Alphabet's Q1 2026 revenue grew 22% year over year to $109.9 billion, with Google Cloud revenue soaring 63% to $20.0 billion on strong demand for AI products and infrastructure. Operating income reached $39.7 billion, up 30% year over year.

Google Cloud's backlog nearly doubled quarter on quarter to over $460 billion. The company will begin delivering eighth-generation TPUs (Tensor Processing Units—chips that enable AI workloads) to select customers for use in their own data centers, a shift from the current model where TPUs are only available for rent on Google Cloud.

CEO Sundar Pichai highlighted the backlog growth as indicating strong near-term revenue potential for Google Cloud. The TPU sales initiative opens a new revenue stream and presents a potential challenge to Nvidia, the leader in data center AI chips.